While gasoline prices have dropped significantly in the past few days, experts are predicting a sharp increase by the end of the week, then another decline around Labor Day.
Average retail gasoline prices in the area have fallen more than 15 cents per gallon in the past week and are well below the national average; but motorists probably won’t enjoy this break at the pump for long, experts said.
Retailers are likely to hike prices significantly in the next day or two, reflecting “routine price cycling” in the region, said Patrick DeHaan, a senior petroleum analyst at GasBuddy, which operates more than 250 gas price-monitoring websites in the U.S. and Canada, including northern Ohio.
DeHaan compared “volatile” area gas prices to a roller-coaster ride. “Where prices stand today is right at the bottom of the hill before they zoom higher,” he said Monday.
The anticipated price increase will account for a spike last Friday in wholesale gas prices and restore gas stations’ profit margins, which have fallen in concert with gas prices, DeHaan said.
Retail gas prices are likely to jump 20 cents or more, and then drop two or three pennies per day until the stations’ margins once again approach zero, which will lead to another price hike at the pump.
“We are on this endless loop of that price behavior,” DeHaan said.
Ohio gas prices on Sunday averaged $3.36 per gallon, which was nearly 38 cents lower than the same date last year and more than 31 cents lower than one month ago, according to data from GasBuddy.com. Local prices were 22 cents below the national average of $3.58 per gallon.
“We have seen some pretty substantial declines over the last week to 10 days,” said Cindy Antrican, public affairs manager for AAA Allied Group Inc.
Gasoline supplies are sufficient to meet current demand, Antrican said. That demand will start to drop this week as a number of area school districts begin classes, ending the summer travel season, she said.
“When supplies are sufficient and demand goes down that equals better pricing,” Antrican said.
Gregg Laskoski, senior petroleum analyst for GasBuddy, said he’s keeping his “fingers crossed” that gas prices are near $3 per gallon near Labor Day.
This morning, most Norwalk gas stations were selling regular gas at $3.39 a gallon. According to GasBuddy, the lowest gas was $3.38 at Marathon on Milan Avenue near Wendy's and the Shell station on Benedict Avenue and the highest was $3.42 at the BP on Milan Avenue north of town and the Hy-Miler at the intersection of Cleveland and Old State roads.
Laskoski said the region is benefiting from the petroleum output, which is at 94 percent capacity, the highest in the country, according to the U.S. Department of Energy. The national average is 90.9 percent, he said.
The lowest priced gas in the country is $3.20 in South Carolina and Hawaii’s $4.31 is the highest.
Laskoski said statistics show that every 10-cent increase in gas prices takes away $11 billion dollar in consumer spending.
Bob and Joan Smith, of Middletown, were filling up their Ford Explorer Monday afternoon on the Speedway on Roosevelt Boulevard. It costs $58.55, which Bob Smith said, was about $5 less than last month.
“Every penny counts,” he said. “That’s $5 more I can spend somewhere else instead of putting it into my tank.”
By Dave Larsen and Rick McCrabb - Hamilton JournalNews, Ohio (MCT)
©2013 the Hamilton JournalNews (Hamilton, Ohio)
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